Texas House Bill HB534

Texas 2021 - 87th Regular

Caption

Relating to the reduction of the sales price of a comparable property by an amount equal to the amount of the typical commission for the sale or purchase of property for purposes of using the market data comparison method of appraisal to determine the market value of real property for ad valorem tax purposes.

Impact

If enacted, HB 534 will specifically adjust how property appraisals are conducted in Texas, particularly for homes and commercial properties. By allowing appraisers to reduce the comparable sales price by the typical commission rate, the bill aims to reflect more realistic market values, potentially lowering the tax burden for property owners. This change could lead to a more favorable appraised value for many property owners, thus impacting property tax revenues at the local level.

Summary

House Bill 534 aims to amend the Texas Tax Code concerning the appraisal of real property for ad valorem tax purposes. The bill proposes that the sales price of a comparable property be reduced by an amount equivalent to the typical commission paid during the sale or purchase of property. This adjustment is intended to facilitate the use of the market data comparison method in determining the market value of properties, ensuring a more accurate appraisal process.

Contention

While the bill is designed to provide benefits to property owners through potentially lower appraised values and taxes, it may face opposition from tax revenue stakeholders. Critics might argue that reducing property values in this manner could diminish crucial funding for municipal services dependent on property taxes. Furthermore, concerns could emerge regarding the fairness and implementation of commission estimates, as they can vary significantly between different regions and types of properties.